Lenders LOVE Paperwork

J Philip Faranda June 28, 2011

A quick perusal of my inbox confirms the fetish-like obsession that lenders have with paperwork. They just love it when a tree dies. 

Case 1: An active short sale file with a 2nd lender is about to go under contract with a buyer, thank goodness. For the past few weeks, a lady at that lender has been sending me emails for a 12 point checklist of things like the seller’s bank statements and a showing log every Friday. The bank doesn’t own the house. My client owns it. Yet the bank lady is acting like an asset manager, threatening to close the file if I don’t send her the TPS showing log each Friday. What file? There isn’t a buyer until we have a contract! 

Case 2: A newish short sale listing client is getting contacted by his lender and a preservation firm. Again, more dislosures and bank statements (which will expire, then they’ll need more) while we chase our tail explaining to the preservation company that the man LIVES IN HIS HOUSE and does not need it winterized,-re-keyed, or otherwise tampered with. But the client doesn’t know this, and wisely asks me if he should jump through all these hoops. I told him it is as needed about as much as he needs his locks changed. 

Case 3: The new asset manager on a supposed REO that I have now submitted three BPO reports and several occupancy checks wants… another set of photos and a new BPO. When I submit it, he writes back about a comp that is not on the MLS that an investor told him about. I asked for an address. I am still waiting. At least with this the bank does in fact have a deed in lieu process going, but agents doing paperwork all day have skinny kids. 

More and more, we are contacted by middle managment grunts at lenders giving us busywork “for the file.” This busywork is just homework some suit in another state needs to reshuffle to justify their job. To sell a short sale, you need a buyer. Nobody appreciates the importance of a complete short sale package than I do, but without a buyer and contract all that busy work does is waste time and paper and create a thicker file then need be. 

Save the trees, and let’s not waste time on unproductive work. 

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